Lanni named director of intranet firm

Gary Thompson

Thursday, Feb. 3, 2000 | 11:06 a.m.

The stock of Youbet.com Inc. jumped nearly 13 percent this morning on today's announcement that MGM Grand Inc. Chairman Terry Lanni was named a director of the intranet horse-betting company.

Youbet stock rose 62.5 cents, to $5.50 a share, in late-morning trading. The stock has fallen from a high of $24.25 a share last May to as low as $3.125 in October due in part to a now-resolved investigation by Los Angeles authorities over the legality of Youbet's operations.

The election of Lanni, the highly respected gaming industry veteran and former member of the National Gambling Impact Study Commission, to Youbet's board may help reinvigorate thoroughbred racing by introducing the sport to a new generation of computer-savvy gamblers.

During the 1990s, racetracks lost customers to the casinos sprouting up around the country. Gradually, though, some tracks began to recapture business through the spread of simulcast racing -- which allowed customers to wager on races at other tracks -- as well as by adding slot machines in selected venues.

Los Angeles-based Youbet.com was formed to provide subscribers the ability to watch and, in many states, to wager from their home computers on coast-to-coast thoroughbred and harness racing through a closed-loop, or intranet, network.

The network allows gamblers to place bets with a track over a personal computer from their homes or offices. It's similar to the phone-betting accounts legal in Nevada, though the wagers are transmitted via a PC, rather than by voice.

Youbet doesn't book the wagers; bets are accepted by state-licensed wagering entities such as Ladbroke USA's track in Pennsylvania.

The company's role in the betting process is limited to transmitting data related to the wagers to the licenced track. Subscribers have access to information from more than 30 tracks around the country, including live audio and video feed and real-time wagering information.

Youbet and Stations Casinos Inc. have announced plans to develop an in-home interactive race and sports wagering system aimed at Nevadans.

Last month, Youbet agreed to settle a civil complaint filed by the Los Angeles District Attorney's Office and paid a total of $1.3 million to, among others, the California Council on Problem Gaming.

Under the settlement, Youbet agreed not to facilitate wagering on races by or accept payment from California residents. The settlement noted that Youbet hadn't accepted such payments, since the wagering accounts were established directly with Ladbroke, which paid Youbet a fee for its services.

The settlement also required Youbet to move its computer system to another state, but allows the company to contract with California residents "when the legal environment is clarified in California and nationally."

Two weeks ago, Lanni and Mandalay Resort Group President Glenn Schaeffer -- both avid horsemen -- were named directors of MI Entertainment, a spinoff of Canadian automotive parts maker Magna International Inc.

MI Entertainment owns five racetracks, including Santa Anita Park near Los Angeles and Golden Gate Fields near San Francisco, which offer simulcast betting. MI Entertainment plans to transform its tracks into entertainment destinations similar to casinos, offering movie theaters, restaurants, retail shops and other amenities attractive to non-gaming customers.

MI Entertainment also plans to develop an off-track, subscriber-based betting network encompassing telephones, interactive television and the Internet.

Neither Lanni nor Youbet Chief Executive Robert Fell could be reached for comment this morning. A Youbet spokesman said he isn't aware if there have been any discussion between Youbet and MI Entertainment.